Phillips 66 mulls sale of European, Asian refineries

Larry Ziemba, executive vice president for refining, project development and procurement, said that, for the right price the company would consider selling a 71,000 bpd refinery in Cork, Ireland, and its joint venture stakes in refineries in Malaysia and Germany. "They're really not strategic," Mr. Ziemba said.

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By ALISON SIDER

Phillips 66 would entertain offers for some of its
refineries in Europe and Asia as it focuses on
growing returns in its US refining system, an executive told
analysts Thursday.

Larry Ziemba, executive
vice president for refining, project development and procurement,
said that, for the right price the company would consider
selling a 71,000 bpd refinery in Cork, Ireland, and its
joint venture stakes in refineries in Malaysia and Germany.

"They're really not strategic," Mr. Ziemba said of the
refineries.

The company's 47% stake in Malaysia's Maleka refinery is a
holdover from Phillips 66's days as the refining arm of ConocoPhillips,
which had upstream operations in Malaysia. Now, "it might be
worth more to Petronas or someone else than it is to us," Mr.
Ziemba said.

Mr. Ziemba said the company likes the cash generated by its
18.5% stake in the Mineraloelrafﬁnerie Oberrhein
GmbH reﬁnery in southwest Germany, but said the
refinery is not key to the company's portfolio. He said the refinery in Ireland is "not
sophisticated."

Most Phillips 66's refining capacity is located in the
US, where the company is looking to take full advantage of
booming production of relatively inexpensive oil. Mr. Ziemba
said the share of "advantaged" crude-oil that is cheaper than
the European Brent benchmark- has grown
from 52% of the crude Phillips 66 ran in 2011, to 70% by the
end of 2012.

"Ultimately, our objective is to push all the Brent crudes
out of our system," Mr. Ziemba said.

The challenge has been getting crude from areas such as
North Dakota that are not yet hooked in to existing pipelines.
Many coastal refineries have turned to rail companies and their
existing routes to connect to the new sources of crude.

Earlier this year, Phillips 66 announced that it signed a
five-year contract for 50,000 bpd of crude oil from North
Dakota to be delivered by rail to its Bayway refinery in
Linden, N.J. The company is awaiting permits to build a rail
rack to supplement that, Mr. Ziemba said.

Now Phillips 66 wants to do the same thing at its Ferndale,
Wash., refinery, where the company is working with third
parties to bring Bakken crude. Mr. Ziemba said the company is
considering building a rail rack at Ferndale, which would also
allow the refinery take rail delivery of
Canadian crude that could then be sent to refineries in
California by ship.

Dow Jones Newswires

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